Supreme Court Once Again Shows Its Disdain For Consumer Rights

For the third time in five years, the U.S. Supreme Court had a chance to reverse a terrifying trend in consumer rights by doing something, anything, to rein in “forced arbitration” clauses that strip consumers of their legal rights and effectively give companies a license to steal. And for the third time in five years, the SCOTUS majority showed its interests lie in protecting the coffers of big business rather than Americans’ access to the legal system.

As we’ve explained a number of times in recent years, arbitration clauses — found in everything from cellphone contracts to cable bills to checking out disclosures — generally work in two ways.

First, they compel customers to give up their right to settle a legal dispute in court by forcing them into a binding arbitration process, often with an arbitrator selected by — and familiar with — the company that would have been sued.

Second — and this is where companies can really get away with illegal behavior — arbitration clauses often prohibit wronged customers from joining together to have their disputes heard a single class action.

This means that every single customer would have to file an arbitration claim against the company. Compare that to a class action lawsuit, where only a small number of wronged customers need to prove that there is a larger, definable group of similar victims.

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